Capital Markets
From The Report: Nigeria 2016
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Already home to the second-largest stock exchange in Africa by market capitalisation, the introduction of foreign-exchange futures trading in mid-2016 is a major step towards the market’s goal of offering increasingly sophisticated investment and risk-management products and services. Although there are a handful of potential initial public offerings in the pipeline, 2016 may not be an active year for new listings, but capital markets, through rights offerings, corporate debt issues and other products will remain a key source of new capital for corporations. The next 12-18 months will see a host of new financial products designed to help corporations raise capital, hedge risk and speculate in various markets.
This chapter contains an interview with Oscar Onyema, CEO, Nigerian Stock Exchange; and a viewpoint from Kayode Akinkugbe, Chairman, FBN Capital.
Articles from this Chapter
Moving up: The sector is set for more varied offerings and accountability
Capital gains: OBG talks to Oscar Onyema, CEO, Nigerian Stock Exchange (NSE)OBGplus
Interview:Oscar Onyema How can capital markets help the budget deficit? OSCAR ONYEMA: As a critical pillar to fund mobilisation needed for capital formation to fast-track economic growth and development, the Nigerian capital markets facilitate the generation of long-term financing and active private sector participation in infrastructure development. For example, the listing of state-owned enterprises (SOEs), will unlock liquidity for the government, open new horizons for financing and expand…
Enhancing marketability: Tseyi Hammond, Deputy Director, FBN Capital, on the status and evolution of the stock marketOBGplus
The strongest selling points of the Nigerian Stock Exchange (NSE) are the reforms and new products it is putting in place, together with the sizeable pools of funds available domestically for investment – a point often missed on cursory examination. However, the state of the economy today is not positive for the exchange. We could cite, inter alia, an economy in modest contraction, squeezed household consumption and uncertain foreign exchange availability despite the liberalisation of exchange-rate…
Change for the better: A new, comprehensive strategy is set to overhaul the sectorOBGplus
The Nigerian Securities and Exchange Commission (SEC) launched the Capital Market Master Plan in November 2015, which charts a course to greater sophistication, liquidity and innovation in the country’s capital markets. The plan, which spans the period from 2015 to 2025, is divided into three key areas: capital market development, non-interest finance (which is how Islamic finance is referred to in Nigeria) and financial literacy. Tackling everything from regulation to transaction costs and international…
Jump start: Macroeconomic conditions are ripe for private equity firmsOBGplus
Private equity (PE) has solidified its position on the cutting edge of the Nigerian economy in recent years, taking stakes in technology, mobile and electronic payments infrastructure, and e-commerce. Local firms have also been especially active in the real estate and consumer goods markets. Developments have sought to strengthen the PE segment. On The Move First, in 2010 Nigeria’s National Pension Commission (PENCOM) allowed pension fund managers to invest up to 5% of funds under management…
United Bank for Africa: Banking and financial servicesOBGplus
The United Bank for Africa (UBA) is one of the largest financial services groups in sub-Saharan Africa. It is the third-largest bank in Nigeria with an estimated market share of 10%. The bank has a presence in 19 African countries, as well as in the UK, the US and France. Among Nigerian banks, it is the most diversified in terms of its reach across Africa. It serves over 8m customers through its more than 600 office locations. Three-quarters of UBA’s gross earnings are derived from its pan-African exposure. The bank’s risk appetite can be described as moderate. Its loan book is well diversified with a non-performing-loan (NPL) ratio of less…
Nigerian Breweries: Food and beveragesOBGplus
Nigerian Breweries (NB) was incorporated in 1946 and opened its Lagos Brewery in 1949. The company has since established other breweries in Aba, Kaduna, Ibadan and Ameke, with the facility at Ameke regarded as the largest brewery in the country. In 2011 NB acquired Sona Systems Associates Business Management and Life Breweries from Heineken. This followed Heineken’s acquisition of controlling interests in five breweries in Nigeria from Sona Group in January 2011. In 2014 the company received approval from the Securities and Exchange Commission and the respective shareholders of NB and Consolidated Breweries to merge the operations of both firms.…
Dangote Cement: Construction materialsOBGplus
Dangote Cement’s (DanCem) foray into cement manufacturing started in 2000, with its acquisition of the federal government’s equity stake in the Benue Cement Company. With investments in excess of $5bn, DanCem’s rise to the top has transformed the industry, taking the sector’s installed capacity in Nigeria from around 4.8m tonnes in 2000 to over 38.1m tonnes currently. DanCem is expanding its footprint across Africa, with recently opened plants in Cameroon, Ethiopia, South Africa, Tanzania and Zambia. While these expansions have taken DanCem’s installed capacity to about 43.3m tonnes, further investments across the continent are set to…
Okomu Oil Palm Company: Agro-industryOBGplus
Okomu Oil Palm Company is one of the top-two palm oil producers in Nigeria, having commenced agricultural production in 1979. Located in Benin City in Edo State, Okomu has gone from solely producing fresh fruit bunches to crude palm oil (CPO). In addition, it fully kicked off rubber production in 2008. With a total plantation area of over 18,000 ha, Okomu had an output of around 43,000 tonnes of palm oil and 7600 tonnes of rubber in 2015. Okomu also benefits from the management and experience provided by its main shareholder and technical partner, Belgian firm SOCFIN, which has a 62% stake in the company. Palm oil consumption in Nigeria currently…
PZ Cussons Nigeria: Health care and personal goodsOBGplus
PZ Cussons Nigeria (PZ) is the largest subsidiary of the global PZ Cussons group, accounting for around 40% of international sales. The company has enjoyed tremendous success in Nigeria and is among the largest firms in the fast-moving consumer goods sector. PZ operates in four segments: personal care, home care, food and nutrition, and electrical goods. Additionally, it is a significant player in West Africa, supported by a supply chain and distribution network that enables PZ to launch new products at affordable prices. Financial Performance PZ has had challenging times recently. In addition to macro headwinds and increased competition,…
UAC of Nigeria: ConglomerateOBGplus
UAC of Nigeria (UACN) is a leading conglomerate, operating in the food and beverages, real estate, paints and logistics sectors. UACN’s business portfolio includes UACN Property Development Company (UPDC); UAC Foods, a joint venture with Tiger Brands; MDS Logistics, which has investments in the development of pharmaceutical distribution hubs in key locations across the country; UAC Restaurants, a joint venture with Famous Brands; Chemical and Allied Products (CAP); Grand Cereals, a leader in animal feeds and edible oils; Warm Spring Waters Nigeria; and UNICO CPFA, a closed pension fund administrator. The firm’s business expansion drive led…
